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The conventional definition of Bayesian Nash equilibrium (BNE) is as follows: A pure strategy BNE is a profile of type-contingent strategies $$(s_i(\theta_i),s_{-i}(\theta_{-i}))=(s_1(\theta_1),\dots,s_{i-1}(\theta_{i-1}),s_i(\theta_i),s_{i+1}(\theta_{i+1}),\dots,s_m(\theta_m))$$ such that for each $i\in P$, $$ s_i(\theta_i)\in\arg\max_{s_i'\in S_i} ...


3

I wouldn't say Nash equilibrium is broader than Pareto-efficiency I'd say its different. As all know the sole Nash equilibrium in the Prisoner's dilemma is not Pareto-efficient and the three Pareto-efficient outcomes are not Nash equilibria. That is to say there is no intersection between the two terms and hence none can encompass the other. I think the ...


1

It is my impression that there is an inconsistency here. If firms want to maximize $V(n)$ which is some "surplus revenue over costs" function, then surplus they will produce. Meaning, that this surplus/profits cannot be given to workers, in the form of wages, because wages are cost. It may be given as dividends or, say, end-year bonus, but in any case it ...


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